These small savings schemes are offering more than 7% interest rate!
These small savings schemes are offering more than 7% interest rate!

Small savings schemes are government-backed financial products designed to encourage savings among the public. They offer security, guaranteed returns, and tax benefits. Perfect for those seeking stable and reliable investment options, these schemes have been a favorite among conservative investors.

Why Consider Small Savings Schemes?

Security and Guaranteed Returns

Investing in small savings schemes is akin to putting your money in a safety vault. Since these are government-backed, the risk is minimal, ensuring that your principal is secure. Unlike the stock market, where returns can be unpredictable, small savings schemes provide assured returns.

Tax Benefits

Many small savings schemes come with tax benefits under Section 80C of the Income Tax Act. This means you can save money on taxes while also earning a decent return on your investments. It's a win-win!

Accessibility and Ease of Investment

Opening an account for these schemes is straightforward and can be done at your local post office or designated banks. The process is simple, making it easy for anyone to start saving.

Top Small Savings Schemes Offering Over 7% Interest

1. Public Provident Fund (PPF)


The Public Provident Fund (PPF) is a long-term savings scheme that offers tax-free returns. It's one of the most popular choices for those looking to build a substantial corpus over time.

Interest Rate

The current interest rate for PPF is 7.1% per annum, compounded annually. This rate is revised quarterly by the government.

Investment Tenure

PPF has a lock-in period of 15 years, with the option to extend in blocks of 5 years.

Tax Benefits

Investments in PPF qualify for tax deduction under Section 80C, and the interest earned is tax-free.

2. National Savings Certificate (NSC)


The National Savings Certificate (NSC) is a fixed-income investment scheme. It's designed for small to medium savings and is highly suitable for risk-averse investors.

Interest Rate

NSC offers an attractive interest rate of 7.7% per annum, compounded annually.

Investment Tenure

The maturity period for NSC is 5 years.

Tax Benefits

Investments up to ₹1.5 lakh in NSC qualify for tax deduction under Section 80C of the Income Tax Act.

3. Kisan Vikas Patra (KVP)


Kisan Vikas Patra (KVP) is a savings certificate scheme aimed at doubling your investment over a period.

Interest Rate

KVP offers an interest rate of 7.5% per annum, with the investment doubling in approximately 123 months.

Investment Tenure

The scheme has a tenure of around 10 years and 3 months for the amount to double.

Tax Benefits

Though KVP does not offer tax benefits under Section 80C, the interest earned is taxable.

4. Senior Citizens Savings Scheme (SCSS)


The Senior Citizens Savings Scheme (SCSS) is tailored for senior citizens, offering them a safe avenue to park their retirement funds.

Interest Rate

SCSS offers a lucrative interest rate of 8.2% per annum, payable quarterly.

Investment Tenure

The scheme has a tenure of 5 years, which can be extended by an additional 3 years.

Tax Benefits

Investments up to ₹1.5 lakh qualify for tax deduction under Section 80C, but the interest earned is taxable.

5. Sukanya Samriddhi Yojana (SSY)


Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme aimed at the girl child's future needs, including education and marriage.

Interest Rate

SSY offers an impressive interest rate of 8.0% per annum, compounded annually.

Investment Tenure

The scheme matures after 21 years from the date of opening the account or upon the girl's marriage after she turns 18.

Tax Benefits

Deposits in SSY qualify for tax benefits under Section 80C, and the interest earned is tax-free.

Comparing Small Savings Schemes with Other Investment Options

Stock Market

Investing in the stock market can potentially offer higher returns, but the associated risk is significantly higher. Unlike small savings schemes, stock market investments do not guarantee returns and are subject to market volatility.

Mutual Funds

Mutual funds offer a diversified investment portfolio, which can yield higher returns compared to small savings schemes. However, they also carry higher risk and do not provide guaranteed returns.

Fixed Deposits

Bank fixed deposits (FDs) offer safety and assured returns but often at lower interest rates compared to small savings schemes. FDs also offer limited tax benefits.

How to Choose the Right Small Savings Scheme

Assess Your Financial Goals

Identify your financial goals, whether it's retirement planning, saving for a child's education, or building a contingency fund. Each scheme serves different purposes, so choose one that aligns with your objectives.

Consider the Lock-In Period

Different schemes have varying lock-in periods. Ensure you choose a scheme with a tenure that matches your financial timeline. For example, if you need access to your funds in 5 years, NSC might be a better option than PPF.

Evaluate Tax Benefits

If tax savings are a priority, look for schemes that offer tax deductions under Section 80C. This can significantly reduce your tax liability while you save.

Compare Interest Rates

Higher interest rates mean better returns on your investment. Regularly compare the interest rates offered by different schemes to make an informed decision.

Steps to Invest in Small Savings Schemes

1. Visit Your Nearest Post Office or Bank

Most small savings schemes can be availed at post offices and select banks. Visit the nearest branch to open an account.

2. Fill Out the Application Form

You will need to fill out an application form for the chosen scheme. Ensure all details are correctly filled in to avoid any processing delays.

3. Submit Required Documents

Typically, you will need to submit KYC documents, such as Aadhar card, PAN card, and proof of address. Some schemes may require additional documents.

4. Deposit the Minimum Investment Amount

Each scheme has a minimum investment amount. Ensure you deposit at least the minimum required to open the account.

5. Keep Track of Your Investment

Maintain regular records of your investment and interest earned. Most schemes provide passbooks or online statements for easy tracking.

Pros and Cons of Small Savings Schemes


  • Security: Government-backed and low risk.
  • Guaranteed Returns: Fixed interest rates ensure predictable returns.
  • Tax Benefits: Many schemes offer tax deductions.
  • Accessibility: Easy to open and manage accounts.


  • Lower Returns: Generally offer lower returns compared to high-risk investments like stocks or mutual funds.
  • Lock-In Period: Many schemes have long lock-in periods, limiting liquidity.
  • Taxable Interest: Some schemes have taxable interest, reducing net returns.

Small savings schemes offer a reliable and secure way to grow your savings, especially in uncertain times. With interest rates above 7%, these schemes are an attractive option for conservative investors seeking stability and assured returns. Whether you're saving for retirement, your child's future, or simply building a rainy-day fund, there's a small savings scheme that fits your needs. Make sure to assess your financial goals, compare interest rates, and consider tax benefits to make the most of your investment.

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